Dem-Gaz to phase out print delivery in El Dorado, Camden and Magnolia

The Arkansas Democrat-Gazette will stop distributing print editions of its daily newspaper in five south Arkansas counties from Monday through Saturday beginning Feb. 11, general manager Lynn Hamilton confirmed in a phone interview today. The D-G's subscribers will instead be provided with iPads to access the digital version of the paper and taught how to use them.

The move will put an end to home delivery and "single copy outlet" distribution in El Dorado, Camden, Magnolia and surrounding areas six days a week. That means the statewide daily paper will no longer be available for purchase at coin-operated boxes or at retailers (such as gas stations or grocery stores) in the five-county area. The Sunday edition will continue to be distributed both to home subscribers and to retailers.

The change was first reported by the Magnolia Reporter after WEHCO Media CEO Walter Hussman spoke at a Thursday meeting of the Rotary Club of Magnolia. (WEHCO is the Democrat-Gazette's parent company; it does not own the Reporter, though it owns a separate Magnolia paper, the Banner-News.)

The Magnolia Reporter story said WEHCO will discontinue distribution of the print edition of the D-G "outside Central Arkansas." However, Hamilton said that was incorrect.

The D-G has already substituted iPads for home delivery service in about 20 counties in east and north Arkansas, he explained. The five counties in south Arkansas represent a similar but distinct experiment in cutting distribution costs and shifting to digital. In the east and north Arkansas counties, the D-G has stopped home delivery entirely — including on Sundays — but it continues to distribute the paper to retail stores and newspaper boxes seven days a week.

"We’re testing digital delivery in a couple different methods in counties remote from Central Arkansas," Hamilton said. "We picked those regions because they’re the furthest from Little Rock and the most expensive for us to deliver a printed paper."

Its distribution in the rest of the state, including Northwest Arkansas, will remain unchanged.

Hamilton said the company doesn't know which "test model" will be most effective, which is why it's experimenting with multiple approaches. "We know digital publication is the future. ... [but] we don’t really have an answer and we don’t know what comes next," he said. In both models, the company gives iPads to its subscribers, though it retains ownership of the devices. It also has a trained team of employees in its circulation department that teaches subscribers — many of whom are older people — how to use the tablets.

"We’re literally going into their homes, hooking up their iPads, sitting with people who are 90 years old and teaching them to use an iPad," Hamilton said. He said it's an "intensive process," but the early results are promising, especially in larger towns such as Jonesboro.

"We’re converting from 50 percent to 70 percent of the former home delivery subscribers to use the iPad," Hamilton said. "The areas where the acceptance rate is lowest is in places like Lake Village where people don't have good internet connections," he said.

In the 20 east and north Arkansas counties in which home delivery has already stopped, the newspaper has so far distributed about 2,500 tablets, Hamilton said. It hasn't had a problem so far with people unsubscribing from the digital edition and not giving the iPads back. "It’s got to be less than five that we’ve lost … some people accidentally drop them or break them, but we haven’t had a problem with [theft]," he said.

Across the U.S., daily newspapers continue to shrink, struggle and close as their ad revenue flow to tech giants like Facebook and Google. The Magnolia Reporter quoted Hussman's description of the decline:

“As recently as 1980, newspapers took in 31 percent of all (United States) advertising revenue,” Hussman said. By 2000, newspapers had 22 percent of the ad market.

“They still had enough revenues to have a good, robust news staff to report news and provide lots of opinions, to serve a watchdog function over government and business and labor, and also enough money to provide a profit and return for the owners,” Hussman said.

Revenues began collapsing when the Associated Press, the world’s leading news-gathering and distribution cooperative, started to sell content to Yahoo, Google and other Internet services, Hussman said. Those services began providing news to their users without charge. Many newspapers followed, he said.

“Despite all of these changes, newspapers continued to increase their revenues – not quite as much as other mediums did, but still increasing. All of that happened until 2006. That was the first year in the United States when newspapers’ total ad revenue declined for the first time in a non-recession year,” Hussman said.

Newspaper revenues have fallen annually every year since 2006. Nationally, newspapers now receive less than 5 percent of all advertising revenues.

Newspapers have responded to the newspaper revenue decline in several ways, Hussman said. The first has been to raise subscription prices. An Arkansas Democrat-Gazette subscription is $432 a year. The Banner-News is $180 a year. (magnoliareporter.com, which is NOT affiliated with either newspaper, offers free access to its exclusively online platform).

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